I was quoted by name as being called in consultation with the United States Chamber of Commerce, and the one thing against it was the fact that I had been in foreign business.

Personally, I think I am rather proud of being a businessman, and I have no apologies to offer, in spite of the McCormick newspapers. I have here the statement of the Detroit Board of Commerce, and due to the shortage of time I do not believe I will read the report. I will put it in the record.

I would like to go on from there with some comments of my own with respect to this proposed fourth point and the various bills that are connected with it.

Chairman KEE. The statement will be included in the record. (The statement is as follows:)

STATEMENT ON H. R. 5615 ON BEHALF OF THE DETROIT BOARD OF COMMERCE

The Detroit Board of Commerce, hereinafter known as we, representing the many vast and diversified industries and businesses operating within the Detroit area whose connections and interests are extended throughout the entire world, has been concerned for the past several years with the current postwar problems as manifested in the instability of the world's currencies, dollar shortages, periodically recurring international economic crises and the efforts and attempts by this Nation in finding a solution or solutions that will end or alleviate the present world problems.

The Detroit area is the center of mass production and the world's largest producer of the industrial products destined for world markets. While the economy of the United States and to some extent, the world, is dependent upon the strength and continued high employment of the mass production industries, the economic well-being of these industries, the city of Detroit and the State of Michigan is dependent upon a high level of international trade and a relatively free and competitive access to the world's markets. Over 800 Michigan firms are engaged in some form of world trade and hundreds of other Detroit and Michigan firms, not actively engaged in exporting or importing, utilize raw materials from abroad or fabricate for firms exporting the finished products. It has been estimated that one out of every seven workers in the Detroit area is employed as a direct result of world trade, and our retail and wholesale merchants depend upon the continued high purchasing power of these workers.

Detroiters during the forthcoming year will pay on an average of $37.10 per person in the form of taxation for the costs of the several foreign aid programs, not including the most recent arms for Europe program. This amounts to an average of $141 per family in Detroit. We of Detroit and the State of Michigan fully appreciate the tremendous stake we have in world trade and in the attempted solutions to the current post- and pre-war problems now plaguing the world's trade, the world economy and the peace and security of this Nation.

On January 20, 1949, President Harry S. Truman first enunciated an idea for a new foreign aid program designed to aid the development of the backward nations of the world. "Fourth, we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas." As a result of the intense interest of the members of the Detroit Board of Commerce in world conditions and foreign aid programs and as a result of the vast amount of experience of the businessmen and industrialists of this organization in the field of international trade, we respectfully request the House Committee on Foreign Affairs and all others interested in this new proposal by the President to review the following comments and suggestions representing the views of the board of directors and the members of the Detroit Board of Commerce:

1. We are completely in sympathy with the proposal by the President to assist in every practical way possible the development of the underprivileged areas of the world. We realize that these backward areas will, if properly developed, become an increasing market for American products in proportion as their resources are developed and purchasing power increased and the standards of living improved.

American industry has been developed to a high standard of production. We have plants of great capacity which must be operated to their normal capacity in

order to employ American labor to the fullest extent. These plants have excess capacity over domestic requirements. To have continued prosperity in this country, it is necessary to seek sales in the export field. Many of these fields have already been developed to a fairly high standard but a greater number are backward and primitive and require power and water and transportation before they are desirable or of potential value to American industry and labor. If properly developed, the greatest markets of the world, hitherto virtually untouched, will rapidly become markets for American industry.

The average citizen of Cuba purchased American goods to the amount of $98 v per person per year, according to the Department of Commerce, 1947. It is estimated that 2,000,000 people in the western area where electricity, power, and roads are available, buy 90 percent of the imports from the United States, while the people in the undeveloped area are buying approximately 10 percent.

In 1947 exports to Cuba totaled $491,000,000. The average purchase per person per year in the prosperous area is approximately $220. There are some 2,000,000 people in the prosperous area so they account for $440,000,000 of the $491,000,000. If the purchasing power of the 3,000,000 people in the backward areas were raised to the same level as those in the developed area, exports from the United States to Cuba would increase $631,000,000 or to a total export per year of $1,170,000,000. It would seem apparent that in improving and developing the backward areas of Cuba the United States exports would increase $698,000,000 per year.

If this can be done in Cuba for the 5,000,000 population it would be apparent that the 20,000,000 peoples of the Caribbean area, if given proper help for their development, would increase the amount of exports from the United States to approximately 24 billion dollars.

We also realize that the political stability of such areas will be definitely served as their resources and their economy are developed. It follows, therefore, that it is in the interests of the United States to implement the President's program.

2. We are definitely opposed to the conception of the Point IV program as a continuation or an extension on a global scale of the Marshall plan at the expense of the American taxpayers. We do not believe that the objectives of this program can be achieved merely by pump priming the world economy with additional billions of the taxpayers' money. While this may have been necessary during the early stages of the ECA for the providing of funds for emergency relief for the war-torn nations of the world, such expenditures now would accomplish little in the way of permanent development or progress and could have a most serious adverse effect upon the economy of this country which is already heavily burdened by taxation to support other foreign-aid programs.

3. We believe that the Point IV program should be thought of as an extension to the underprivileged areas of the world, of American technical know-how and investment, such as has been going on for years, more particularly in areas of the world not thought of as underdeveloped. Billions of dollars of American capital are now at work around the world, in many instances in cooperation with local capital and is achieving the very results which the President is seeking. We agree with the President that a new emphasis should be given to this type of cooperation between American know-how and capital along with the skill and capital of overseas countries, with particular direction toward those areas which are economically retarded and where the need for economic development is particularly great, and where raising the standards of living will result in a stronger bulwark against the inroads of destructive political and economic ideologies. 4. We believe that this new program must be operated on a business level and not on a governmental level. Businessmen and industrialists in these countries generally have a more intimate knowledge of what is needed to bring about lasting improvement than do the governments. Furthermore, direct loans to sound businesses and industries will ultimately be repaid whereas it is doubtful if any of our loans to governments will ever be repaid.

We especially stress the need for help other than money. By this we mean the voluntary aid which could be given by American management in the way of technical help and know-how. It will be impossible for the United States Government to act as other than a clearinghouse for industrial projects-they should be largely handled on an industry-to-industry basis, the details to be worked out by industry itself.

5. We believe that there is no necessity of setting up any new bureau or any new Department in an existing bureau of governmental administration with a large and expensive staff in order to carry out the proposed program. We would

be particularly opposed to placing such a program under the jurisdiction of the Department of State.

We believe that from the governmental level, the Export-Import Bank is the proper governmental agency to cooperate with American free enterprise in accomplishing the purposes inherent in the President's Point IV program. We see ✔ no need of any special administrative machinery being created for this purpose. Many American companies are now at work in these fields and are seeking new fields for the investment of their capital and technique. Given the proper encouragement, American industry and only American industry can and will do the task.

6. We do not believe that this is a field for American financial aid in the form of gifts but that all projects brought to the Export-Import Bank should be considered by the bank in the light of the usefulness of the project in question and the banking risk involved in lending the Export-Import Bank's money for the development of such projects. In other words, the implementation of the Point IV program should and must be a business proposition from start to finish. The Export-Import Bank expects to receive its money back with a reasonable rate of interest. It is not a philanthropic institution.

We believe that if the program can be implemented in this straightforward manner, the results will be far greater and the respect of the countries served will be assured.

7. We wish to go on record as emphatically opposed to the creation of bureaucratic administrative machinery in Washington, which we believe will only be an added burden on the American taxpayer, particularly as it would badly serve American good will abroad, create the impression of Yankee economic imperialism, and stifle the efforts of free enterprise, both in the United States and in the areas of the world which we are attempting to serve.

8. We believe that the Export-Import Bank could serve to implement the Point IV program in two ways:

(a) By direct loans to developments in underdeveloped countries where it would be difficult or impossible to obtain the loans from private sources and where American engineering firms can prove to the satisfaction of the bank's officials that such loans are of a productive nature and are a good business risk.

(b) By the encouragement of private American capital in overseas investments by means of the guaranty principle—that is, by freeing American foreign investments from the risks other than the ordinary everyday risks involved in domestic investments. By this we mean, (a) freedom from the unusual risk of inconvertible currencies, (b) freedom from the unusual risk of loss of investment in whole or in part on account of political contingencies such as confiscation, seizure, destruction or forced abandonment due to the act of any government which prevents the further transaction of business.

9. We further believe that a special committee consisting of American businessmen, industrialists and engineers, should be organized to assist the ExportImport Bank in its work of implementing the Point IV program. The ExportImport Bank should not approve any specific project under the program until a report on that project has been filed by this committee.

CONCLUSION

In conclusion, we support the principles voiced by President Truman's suggestions for a program to assist in the development of the underdeveloped and economically retarded nations of the world. We respectfully urge the committee to see that this program is worked out on a business level and not on a Government level. Only by so doing can the aspirations and hopes held for this program be realized without placing an undue and dangerous additional burden of taxation upon American economy and the American taxpayer.

Mr. GIFFORD. I look at it this way: If you were approaching this as a business problem, and we had the board of directors sitting around the table, probably the first question they would ask is, "What is the objective?"

I think probably the second question is, "What is it going to cost ?” The third question would be, "Who is going to run it?"

The fourth question would probably be, "What are the chances of success?"

In analyzing that it seems to me that bearing in mind what the State Department has said at different times, that you must take into account the established policies of our State Department in the handling of foreign affairs.

As regards the objective, it is my opinion that it is still very much in the air. The President made a statement in one sentence to give these people the benefit of our scientific and technological knowledge.

In a very short period of time many, many agencies went to work, and as designed at the moment, I think it is completely removed from what the President had in mind.

Now, the objective as expressed by the President is excellent and I am in favor of it. I was advocating help of this kind even before the President made his fourth point public. If we want to more or less save the world we cannot do it by dollar diplomacy. It has to be done by teaching these people how to produce and how to raise their standards of living and by so doing I believe you would stop the spread of false doctrines.

In so doing you would also help this country and help every other country in its objective.

Now, we talk in this proposal of roughly $45,000,000. I read it with a great deal of interest. I do not know how much the rest of you have.

You spent a lot of time this morning talking about technical assistance. There is not a dollar in the appropriation as suggested that is for industrial technical assistance. Every dollar of it is on the basis of going through a Government agency, completely skirting what I interpret the President's remarks to mean.

In analyzing technical assistance I think you have only one place to go for information as to how technical assistance may be handled. and that is: What did they do with technical assistance in ECA?

Well, it is rather interesting, if you have time to check into it. In the first place they set up $6,000,000 for technical assistance and based on letters which I have in my files it would be too much trouble if ECA were to give technical assistance abroad to industries that want technical assistance. They would have been flooded so a rule was made to cover this. It was not done in England or France but a rule was made here that technical assistance would only be given to a foreign government. This rule was made by ECA as it happens. I am particularly interested in England and its possible recovery. I went to England early last summer at the invitation of the Federation of British Industries and in conjunction with them, and with the advice of Mr. Finletter, chief of the ECA mission, we prepared a plan of Anglo-American technical cooperation. It was intended that requests for technical aid should go from them, through the ECA mission in England, to the British Board of Trade. Unfortunately this plan was presented direct to Sir Stafford Cripps and became the Cripps plan. This change destroyed about 95 percent of its usefulness as British industry is blocked off from the kind of technical assistance it needs. Visitation teams will never accomplish but a small part of what is needed. Private industry cannot get specific help.

I have made test cases of all this. An English firm wants technical assistance. It is private enterprise. Neither the British Government nor the ECA will approve it. In other words, there is no private English firm today that can get any technical assistance from us.

Was this the intent of Congress when $6,000,000 was set aside for technical assistance?

A few days ago, or very recently, ECA made a release that the first. technical assistance project of France had just been undertaken. There were two men coming over to study the mechanization of farms. To me that is a type of technical assistance, but it is not the technical assistance that is going to build up the productivity of the people abroad.

Now, I asked this question in different countries in Europe: "Where do you think we get the money so that we can help you? Where does this wealth come from?"

swer.

Various answers are given, but none of them give the right anThe answer is very simple, if you think of it. It comes from the productivity of our working people in every line of industry, agriculture, and so on. It is the fact that we can produce approximately three times as much per man-day as can Europe with less physical effort. We produce that wealth.

We talk about dollar shortages. Without increased productivity the dollar shortage will get worse. It will not get better.

One of the Swiss economists, in analyzing the program, said, "In talking about dollar shortages you are considering the coating on the tongue as the disease. The disease is that these people cannot produce the wealth with which to buy the things that they want."

Now, we speak in this first stage of $45,000,000 for technical assistance, $10,000,000 which is for the United Nations. Are we talking about $45,000,000 or $5,000,000,000?

There is not anything in any part of the statements or publications today that says what the ultimate goal is. Are we shooting at another 5 billion, 6 billion, or 8 billion or 1 billion dollars a year out of the American taxpayers, and are we leading these people abroad to feel that they can look to us for all future needs?

In other words, are we trying to play God to the rest of the world? I think the American taxpayer is interested in what this is getting us into.

Now, it can be done in various ways. I am entirely in accord with Mr. Krug when he says that these other Government agencies, such as Agriculture, and so on, have done an excellent job and should be in the picture. They They are in the picture now and they are doing a darned good job.

I am not sure just who would be the boss if this bill goes through. In other words, Agriculture today is doing an excellent job, and the expense is relatively minor, and it is being paid, about three-quarters, according to the reports that I saw, by the foreign governments. They are asking for that help and the foreign governments are paying, outside of the few technicians, the expense of it. About 75 percent is paid by the foreign government.

If we start out with technical missions-and, incidentally, I am not too enthusiastic about the technical missions that I have had experience with, for some of them are good and many of them are not-I would like to ask this question: Does anyone have a complete library of the technical mission reports that have been made by the various missions out of this country to all countries of the world? I do not think you could find it. They may be able to accumulate it. How